Information Technology, Corporate Business Firms and Sustainable Development: Lessons From Cases of Success From India

Summary

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This paper critically analyzes some cases of success of interventions initiated either by corporate firms or supported by the corporate firms which lead to community development. A multiple case study approach has been adopted. The range of interventions range from being very specific to being very wide in their approach and help the grass root level communities to emerge out of the poverty trap. The analysis culminates in development of a framework which attempts to link the nature of the intervention with the stage of development. The study concludes that the interventions have to be linked with the stage of development and resource strength in a particular geographical location. Where the stage of development is low, wherein people do not even have access to basic amenities, the nature of interventions have to be wide so as to simultaneously have positive impacts on food, shelter, water, education, employment, women empowerment (as in SWRC Barefoot College initiative)

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Information Technology, Corporate Business Firms and Sustainable Development: Lessons From Cases of Success From India

BACKGROUND

The pictures presented by poverty are grim. By 1999, 1,170 million people lived in extreme poverty1 (World Bank, 2003). "Though the poverty levels have declined in East Asia and Pacific, in Sub Saharan Africa, the number of people steeped in extreme poverty increased by 74 million. For 1998-2000, the FAO estimates that 799 million people or 17 percent of the population in developing countries were undernourished. Additionally there are another 30 million undernourished people in transition economies of Eastern Europe and the former Soviet Union. 115 million children remain out of school. In South Asia, where only 61 percent of girls complete primary school, the average woman has 3.4 years of schooling. In 2002, 42 million adults and 5 million children were living with AIDS. Lack of clean water and basic sanitation is the main reason for so many health related problems. In 1990, diarrhoea led to 3 million deaths, 85% of them were children. In 2000, 1.2 billion people still lacked access to an improved water source."

Human Development Report, 2003

In a world, where there are amazing technological achievements at one end, there are issues of people living in abject poverty. The idea is to include people at the bottom of the pyramid and include them in the economic development process. The corporate sector has a distinct role to play in bringing out this change. The poor pose a lot of challenge for the public sector. The public sector has neither the expertise nor the resources to provide resources to provide goods and services on a scale sufficient to reach the approximately four billion people who currently earn less than $2000 year. The private sector has both. Prahalad and Hammond (2004) in their study point out that there are some innovative initiatives undertaken by the private sector which aims at products and services targeted at the poor (bottom of the pyramid). In their study, they have pointed out the following:

* The poor live in very high cost economies. For most products and services, they end up shelling more money for most products that they buy. Costs to the poor can dramatically reduced if they could benefit from the scope, scale and supply chain organization of large enterprises, as do their middle class counterparts.

* Many interventions end up exploiting poor rather than do them good in the long run

* The poor have a purchasing power.

* Many of the BOP markets are geographically concentrated. A slum such as the one located in Dharavi in just 175 hectares, generates $450 million in manufacturing revenues.

* The poor welcome new technologies.

SUSTAINABLE DEVELOPMENT AND PROFITABILITY

The World Commission on Environment and Development (1987, p.8) states, "sustainable development meets the needs of the present without compromising the ability of future generations to meet their own needs." Reinhardt (2003) indicates that there are issues in measuring sustainability at the firm level and there is also confusion about the term sustainable development itself. When one talks about the term sustainable development at the firm level then there are issues about its measurement. Reinhardt (2003) quotes the two Dupont's formulas about measuring the sustainability. One is the private cost test and the other is the social cost test. Under the first test, a sustainable firm is one that augments its shareholders value when all stocks and flows are measured at the prevailing private costs, as those costs are determined by market forces and by current government regulations. Companies deliver profits to their shareholders by creating value (Holliday, 2001). Under t...

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